History of Lean

Manufacturing and
Lean Thinking
CHAPTER 2
In 1945, Toyoda challenged Taiichi Ohno to
learn how to compete with US Automakers
not on building large volumes of similar
models, but many models in low volume
Ohno learned a lot from this experience, but
felt Ford stopped short of a better system.
Ohno went to the US and studied Ford mass
Ohno was given 3 years to develop a system
assembly processes at the Rouge River
to achieve this goal.
Plant.
Ohno also studied the supermarket concept
of ordering and replenishing stock by a It took Ohno over 20 years to develop the
signal system. This resulted in Ohno system that became known as The Toyota
applying the KANBAN concept to the Production System (TPS)
system he would develop.
History of lean
It took until the 1974 Oil Crisis before
outsiders and others in Japan really took
notice of the TPS system that Ohno built
and the way it was allowing Toyota to
compete when others were faltering.
 Started out with Henry Ford’s
assembly line in the early 1900’s.
First person who continuously
worked to make sure his process
was as efficient as possible.

History of
Lean
Then shortly after WWII Taichi
Ohno and Kiichiro Toyoda took
aspects of Ford’s work with new
ideas for continuous improvement
and created the Toyota Production
System.
Lean
Manufacturing

 Typical use of
automation which results
in running parts faster
and faster but result in
increased inventory as
downstream cells cannot
use the product as fast as
the upstream equipment
is producing the parts.
Increases inventory
which is waste
 Lean Manufacturing came to the US
with James Womack’s Book, “ The
Machine That Changed The World” in
Lean 1990
manufacturing
cont’ Focused on Toyota Production System
Concepts and Why Toyota was able to
so successful over US Auto
Manufacturers.
Thinking Lean

01 02 03 04 05
Specify value  Identify the value Create flow  Let the customer pull Seek perfection 
• can only be defined by the stream  • reduce batch size and WIP  product through the • continuously improve
ultimate customer  • exposes the enormous value stream  quality and eliminate waste
amounts of waste  • make only what the
customer has ordered 
 Lean provides tangible benefits

Reduces costs not just selling price 

• Reduces delivery time, cycle time, set-up time 

• Eliminates waste 
• Seeks continuous improvement 

Benefits of Improves quality 

Lean Concept
Improves customer ratings and perceptions 

Increases overall customer satisfaction 

Improves employee involvement, morale, and company culture 

Helps “transform” manufacturers

Lean Thinking

 Muda (waste): any activity that uses resources but

creates no value.
 Principles:
 Specify value by specific product.
 Identify the value stream for each product.
 Make value flow without interruption.
 Let the customer pull value from the producer.
 Pursue perfection.
Womack and Jones, 1996.
Lean Thinking: Value

 Defined by ultimate customer (end user).

 Must be expressed in terms in terms of a specific product and/or service which
meets the customer’s needs at a specific price at a specific time.
 Created by the producer.
Lean Thinking: Value Stream

 APICS Dictionary (10th Edition):

 “the process of creating, producing, and delivering a good or service to the market…
 For a service, the value stream consists of suppliers, support personnel and technology,
the service ‘producer’ and the distribution channel.
 The value stream may be controlled by a single business or a network of several
businesses.”
 Systems analysis is needed to maximize value in the value stream—the focus
needs to be on the whole stream, and not just on individual activities within the
stream.
Lean Thinking: Flow

 A service being provided for a customer needs to move through the system
without interruption.
 Womack and Jones: find “ways to line up all of the essential steps needed to get a
job done into a steady, continuous flow, with no wasted motions, no interruptions,
no batches, and no queues.”
 Waiting adds no value—it’s a waste.
 Flow versus batch-and-queue in the traditional mode of functions and
departments.
 Must be achieved in small-lot production as well as high-volume assembly line
operations.
Lean Thinking: Pull

 Jack: “We don’t make it until you order it.”

 Most services can’t be created for inventory—so it is
necessary to reduce lead times and excess inventories
of support materials to eliminate waste and add value.
 Let the customer pull products from you as needed
rather than pushing products, often unwanted, onto the
customer.
 Deal with orders rather than forecasts and inventory.
Lean Thinking: Perfection

INTERACTIVE RESULTS TRANSPARENCY: IN A FEEDBACK FROM SEEK PERFECTION IN

FROM IMPLEMENTING LEAN SYSTEM, EMPLOYEES SPURS PRODUCT/SERVICE,
THE FIRST FOUR EVERYONE CAN SEE CONTINUOUS FLOW, AND PULL
CONCEPTS. EVERYTHING, SO IT’S IMPROVEMENT. PROCESSES.
EASY TO DISCOVER
WAYS TO CREATE
VALUE.

THIS CONCEPT MEASUREMENTS SERVICES MAY

FOCUSES ON CHANGE (PPT, PPM, PPB, DELIGHT A CUSTOMER
CONTINUOUS ……) —BUT IT IS ALWAYS
IMPROVEMENT. POSSIBLE TO MAKE
CHANGES THAT WILL
DELIGHT THEM EVEN